Chamber News

New legislation has come into effect end of last month, which is designed to benefit small businesses, by making it easier for them to bid for public sector contracts.

Central government spent an unprecedented £11.4 billion with small and medium-sized enterprises (SMEs) in 2013 to 2014. The Minister for the Cabinet Office Francis Maude has announced new figures showing that a record 26.1% of government spend went toSMEs.

The new data shows that central government spent 10.3% directly with SMEs, and 15.8% indirectly. View the data oncentral government spend withSMEs2013 to 2014.

A refreshed Contracts Finder website, at www.gov.uk/contracts-finder has been launched. It now has a much better search function, including the facility to search by location. Contracts Finder covers current and future public sector contracts above £10,000 in central government and above £25,000 in the wider public sector. It’s free to use, and you can use it from a computer or a mobile device

Here’s the basic outline:

• At the end of March, new legislation came into force that should open up the public sector’s £187 billion spend each year
• The legislation means the entire public sector supply chain will now be paid within 30 days -vital for small businesses. Everyone in the supply chain must comply with 30 day payment terms, including suppliers and sub-contractors public bodies must publish an annual late payment report, making their accountability more transparent
• A new version of the Contracts Finder website, launched on 23rd February, should make it easier and quicker for companies to find opportunities to bid for. https://www.gov.uk/contracts-finder
• The new rules make it easier for small and medium businesses to bid by splitting up big contracts, removing unnecessary bid criteria and questionnaires for low value contracts. https://www.gov.uk/tendering-for-public-sector-contracts. the bidding process is simpler across the wider public sector – complex forms, such as Pre-Qualification Questionnaires, are now abolished for low value contracts
• A service called “Mystery Shopper” also allows suppliers to anonymously raise concerns about unfair buying practices so they can be investigated and resolved. https://twitter.com/govmysteryshop

East of England feedback from small and medium businesses:

• 43% see late payment from customers as a hindrance to growing their business
• 36% don’t know where to look to find new business opportunities
• 41% find searching for new business opportunities too time consuming
• 31% are wary of working for new clients that might have bad credit
• 35% find putting together bids for new business too time consuming
• 32% don’t know where to get advice or training to win new contracts
• 15% are planning to bid for public sector contracts in the next 12 months

Headlines:

• UK GDP unrevised in Q4 with net trade and consumer spending helping to support growth
• Business investment declined at this fastest rate for six years
• A period of deflation is possible in the coming months, but unlikely to last

Overall, last month’s data releases confirm that the UK’s economy remains strong. However, the recovery still faces several obstacles, intensified by political and economic uncertainty. More must be done to support long-term business investment in particular if the UK is to remain among the fastest-growing countries in the G7

Economic growth in Q4 unrevised at 0.5%

The second official estimate for Q4 2014 economic growth (GDP) was unrevised at 0.5% and therefore remains the slowest rate of growth since Q4 2013. This easing in growth mirrors the results from the BCC Quarterly Economic Survey (QES) over the same period where most of the key national balances are now below the all-time high levels recorded over the last year. In annual terms, UK GDP growth was unrevised at 2.7% in Q4. The latest GDP figures confirm that, despite a recent easing in growth, the UK’s recovery remains strong.

UK exports helping to power growth

The second estimate of Q4 2014 GDP revealed that exports played a major role in driving growth in the quarter. The UK’s trade balance (exports minus imports) deficit narrowed from £13.1 billion in Q3 2014 to £10.4 billion in Q4 2014. This improvement was driven by a 3.5% rise in exports, the biggest quarterly rise since Q2 2013, which more than offset the 1.3% rise in imports over the same period. Consumer spending continues to help power growth, rising by 0.5% in Q4, the fourteenth consecutive quarter of growth.

Business investment weakens

While net trade and consumer spending rose in the final three months of 2014, business investment weakened. UK business investment fell by 1.4% in Q4 2014, the second successive quarterly fall and is the biggest drop since Q2 2009. This fall can be partly attributed to weaker investment by the oil and gas industry, amid falling oil prices. Nonetheless, the fall in business investment over the second half of 2014 is a timely reminder that more needs to be done to promote business investment and achieve better balanced growth.

UK growth likely to quicken this year

In its latest inflation report, the Bank of England expects that the UK economy will grow at a faster rate this year, compared to 2014. The central bank forecasts UK GDP to grow by 2.9% in which if achieved would be the fastest rate of growth for nine years. The Bank of England has upwardly revised its UK GDP forecast for 2016 to 2.9%, from 2.6% and for 2017 from 2.6% to 2.7%. While its growth forecast is higher than our own, their view that UK economic growth has a good chance to regain stronger momentum in the medium term is broadly in line with our own.

Supported by a strong jobs market

In the three months to December 2014, UK employment rose by 103,000 compared with the previous three months to 30.9 million, the highest number since records began. The number of people who are unemployed fell by 97,000 over the same period to 1.86 million. As a result, the unemployment rate was 5.7%, down from 6.0% in the previous three months. This mirrors the Q4 2014 QES where the backward looking employment balances rose in the quarter. However, the youth unemployment rate, at 16.2%, remains almost three times the national average.

Consumers spending power is rising

Average earnings, including bonuses, rose by 2.1% in annual terms in the three months to December 2014. This is more than four times December’s comparable inflation rate of 0.5% and means that wages have their biggest lead over inflation since April 2008. With two-thirds of UK GDP driven by consumer spending, the rise in real earnings and therefore consumer’s spending power is good news for the UK’s near term economic outlook. However, it is important to remember that wage rises can only be sustainable if they are matched by rises in productivity.

To coincide with the launch of National Careers Week, which focuses this year on ‘Life Skills’, a report from the British Chambers of Commerce (BCC) highlights that more than half of UK employers believe a lack of soft skills hinder young people’s readiness for work. This reflects the beliefs of Norfolk Chamber members

The BCC Workforce Survey,Developing the Talents of the Next Generation,found that 57% of employers cite a lack of soft skills such as communication, resilience and team working, as the main reason why young people are unprepared for the world of work. The survey also found that a lack of focus on employability and enterprise in educational institutions (53%) and a lack of careers advice (46%) impacts on young people’s prospects in the world of work.

The Chamber is proposing a number of measures to get educators and businesses working together to help young people develop the life skills they need to succeed in the world of work. This supports the wider activity that Chambers of Commerce are already doing around the country to bridge the gap between the world of education and the world of work:

• Measuring schools on their pupils’ career destinations– by focusing schools not just on ‘teaching to the test’, but also employability and life skills, we can help ensure young people have a smoother transition into work;

• A guarantee of a business governor at every secondary school– making schools more aware of local business needs and helping to build healthy relationships with their local business community;

• Promoting enterprise modules for all higher and further education students– helping students to build up knowledge of business and prepare for the world of work or entrepreneurship;

• Universal ‘experience of work’ in all schools UK-wide to improve employment prospects– ensuring that all pupils leave school with high-quality exposure to business and the core skills needed for work.

Caroline Williams CEO Norfolk Chamber said:

“For too long, many of Norfolk’s young people haven’t had the preparation or opportunities they need to succeed. We are determined to change the system and ensure that businesses, educators, and government shoulder the burden when it comes to preparing young people for work. We often hear from businesses struggling to plug skills gaps, who express frustration that young people lack the soft skills needed to succeed in the workplace. We need to work better to create a pipeline of talent, ready to become the next generation of team players, entrepreneurs and business owners.

“Employers put exposure to work and life skills like team working, determination, and the ability to communicate effectively, at the top of their wish list when looking to hire. Businesses need to play their part by providing experience of work to young people that goes beyond photocopying or making cups of tea – experience that gives a meaningful insight into working life.

“By measuring schools on pupil career destination, putting business governors in secondary schools and giving university and college students the option to take business and enterprise modules, we can help to give young people the best chance of building a successful career. National Careers Week is an excellent opportunity to highlight the range of careers available to people entering the workforce, and the skills that are at the top of the wish list for employers.”

The BCC will be running a chamber network general election campaign throughout March, with a different theme each week. The first week (2nd- 8thMarch) focuses on developing the talents of the next generation. The site goes live today Monday 2ndMarch via this link:https://www.businessplanforbritain.co.uk/. You can also follow the campaign on Twitter: #chambermanifesto

Norfolk Chamber and Norse Commercial Services recently held a dinner with a group of Norfolk’s business leaders to debate issues being faced by the larger businesses in our county. Topics discussed included: broadband and mobile coverage; how to engage with young people and accessing skilled staff; and the opportunities along the growth corridors along of the A11, A47. These topics are all part of the campaign areas that Norfolk Chamber will be championing throughout 2015 as part of our ‘Business Plan for Norfolk’.

The group was privileged to be able to hold their dinner in The Keep at Norwich Castle and were treated to a guided tour of the work of Norfolk’s finest artists with Dr Georgia Bottinelli and a further opportunity to handle some of the Castle Museum’s artifacts with Dr John Davies.

Peter Hawes, Managing Director, Norse Commercial Services said: “The dinner was an excellent event, lovely venue and food, and interesting company. It was great to hear the views of other local business leaders, and I’m sure the Chamber will be working hard on all of the issues that were raised.”

ScottishPower Renewables has hailed a major breakthrough in efforts to reduce the costs of offshore wind after the East Anglia ONE project successfully secured a Contract for Difference (CfD) in the completive competitive auction process run by the UK Government.

The successful bid was announced today as the shareholders work towards ScottishPower Renewables’ purchase of Vattenfall’s 50% share in East Anglia ONE.

SPR will take the project forward initially as a 714 megawatt (MW) development after winning the auction with a price of £119/MWh, ensuring that East Anglia ONE will be the best value offshore windfarm ever developed in the UK.

ScottishPower Renewables, which led East Anglia ONE’s participation in the auction, has been able to bid at a price that is lower than anything previously seen in large scale offshore wind thanks to the engineering, procurement and operational efficiencies that have been introduced in to the project.

The development will see around 100 wind turbines installed in the southern North Sea. The overall investment will be in the region of £2 billion, and the project could meet the annual electricity demands of around 500,000 homes. East Anglia ONE has planning consent for up to 1,200MW, and ScottishPower Renewables may still seek to build out the full project by securing further capacity in future CfD auctions.

The East Anglia ONE project will now be developed solely by ScottishPower Renewables. Vattenfall and ScottishPower Renewables will continue to develop the rest of the East Anglia zone.

Caroline Williams CEO Norfolk Chamber said: “This is such good news. The Chambers worked closely with Scottish Power and local MPs duringthe CfD budget lobbying period last Autumn to be in a position to get this result. We congratulate Scottish Power on being able to rise to the challenge set and coming out a winner. This is great news for Norfolk and the region.”

Keith Anderson, CEO of ScottishPower Renewables, said: “We are delighted to have secured a contract to take East Anglia ONE forward, which will be one the best value offshore windfarms ever developed anywhere in the world. It signals a major industry breakthrough in efforts to reduce the costs of offshore wind. ScottishPower Renewables has been leading efforts to drive down costs for many years, and we delivered considerable efficiencies in the recent construction of West of Duddon Sands. With East Anglia ONE, we are driving the industry towards its cost reduction targets and demonstrating the long term sustainability of offshore wind.

“Final negotiations will now commence with the wider supply chain, and in the coming months we will look to secure local port facilities to support the project, as well as agreeing contracts for the major components. Overall investment to deliver the project will be in the region of £2bn, representing an opportunity to create significant UK economic benefit and creating employment opportunities for up to 3,000 people.

“We would also like to thank Vattenfall and the efforts of their team in helping to secure planning consent for the project. We will continue to work with Vattenfall on potential future projects in the East Anglia Zone.”

Gunnar Groebler, Head of BU Renewables at Vattenfall, said: “This is welcome news for East Anglia ONE. It has taken five years to reach this point since The Crown Estate awarded the lease to Vattenfall and SPR and almost nine months since being awarded development consent. Now SPR will take on sole responsibility for delivering EA1 after completing the purchase of Vattenfall’s 50% share in EA1.

“Vattenfall is committed to growing its wind business across the European markets it operates in. The divestment of our 50% shareholding in EA1 to SPR means that we can prioritise investment in the UK and the rest of our European wind portfolio. We still see a promising future for the rest of the East Anglia Development Zone – and UK offshore wind generally – and we will continue to work with SPR to deliver the remaining five projects.”

The company is now seeking to start construction in 2017, with the first turbines installed by 2019, and hopes that the project will be fully operational during 2020.

More than 90% of all expenditure on the project to date has been incurred in the UK and, during the planning process alone for East Anglia ONE, more than £15m of contracts have been awarded to local companies working on the project. A separate £17m contract was also awarded to Wood Group of Aberdeen for the construction and installation of weather monitoring masts.

ScottishPower Renewables recently completed the 389 MW West of Duddon Sands Offshore Windfarm, a joint venture with DONG Energy, and is developing the 350MW Wikinger Offshore Windfarm in Germany. Vattenfall is the world’s second largest operator of offshore wind and in the UK operates 540MW from three offshore schemes.

The February edition of the Norwich Economic Barometer has now been published. The Confederation of British Industry (CBI) has upgraded its forecast for the UK’s economic growth this year and expects the UK Economy to expand by 2.7% in 2015, compared with its November forecast of 2.5%.

The ONS reported that the UK industrial output fell by 0.2% in December, mainly hit by maintenance work in the North sea oil and gas fields.

Salaries for professional and managerial workers are rising in the region with the highest rates being paid in Cambridgeshire and for staff in the energy sector, according to a survey by recruitment firm Cooper Lomaz. The average professional/managerial salary in Norfolk is £33,649.

Norwich’s emerging reputation as a centre for technology businesses has been underscored by a new report championing the UK’s digital economy which ranks it 15th in the UK. Group Lotus has announced plans to create 150 new jobs, with the launch of a new car.

To read the full report, click here.

• There was an average 3.1% fall in the JSA claimant count across Norfolk
• The latest Quarterly Economic Survey results highlighted ‘an all time’ high’ in the number of manufacturers and service employers looking to recruit staff
• In the three months to December 2014, UK employment rose by 103,000 and unemployment fell by 97,000 compared with the previous quarter.
• The unemployment rate was 5.7%, compared with 6.0% in the previous three months.
• The youth unemployment rate was 16.2%, unchanged from the previous three months but much lower than the 19.9% recorded a year earlier.

Commenting on the latest labour market figures, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce said:

“The latest figures highlight the flexibility and resilience of the UK labour market. The growth in employment and fall in unemployment are stronger than a month ago and point to improved momentum in the economy after a weaker patch last year. It would not therefore be surprising if the ONS updates its preliminary 0.5% GDP figure for the fourth quarter of last year.

“One area of concern is that youth unemployment remains unchanged after a long period of steady declines. While youth unemployment remains much lower than a year ago, it is consistently higher than the adult employment rate, so we need to look at ways to bring this down further.

“It is positive that earnings are now increasing much faster than prices, however, it is important to remember that wage increases can only be sustainable if they are matched by increases in productivity. We must match the positive developments with the right policies, in order to support business confidence and help drive the economy forward.”

The House of Lords Digital Skills Committee published their report ‘Make or Break: The UK’s Digital Future’ today. The Select Committee on Digital Skills was appointed by the House of Lords on 12 June 2014 ‘to consider and report on information and communications technology, competitiveness and skills in the United Kingdom’.

The British Chambers of Commerce (BCC) provided evidence last year to this Select Committee and cited the work being done locally by Norfolk Chamber of Commerce which was specifically referenced within the report.

The report refers to Chambers of Commerce a number of times and supports the BCC manifesto which highlights the need for more business governors on school boards. Norfolk Chamber was mentioned on p75 where it states “We heard the example of Norfolk Chamber of Commerce, which ran a series of events on digital skills bringing in some of its local businesses to deliver workshops and talks on the latest technological and digital advances. This provided the rest of the local business community the opportunity to exploit those advances and grow.” To read the full report click here.

Many companies who export to Saudi Arabia may be aware of an email being circulated by “Exportal” (a company based in Saudi Arabia) informing exporters of the new Import procedures and asking them to register for the service.

Following investigations by the Arab British Chamber of Commerce and the British Chamber of Commerce we can categorically say that this system is not applicable here in the UK and will not be for the foreseeable future.

The ABCC’s current advice and that of the BCC is “DO NOT REGISTER” or sign up to this system as it does not apply to the UK.

The Norfolk Chamber’s high profile policy event that focused on the theme of ‘Look at Norfolk. See Success’ was an overwhelming success on Friday, with over 160 people taking part.

Expertly hosted by Adam Marshall from the British Chamber of Commerce, local Members of Parliament Chloe Smith, Simon Wright, Henry Bellingham and George Freeman focusing on their personal areas of expertise with topics ranging from young people, international trade, business growth and mobile and broadband.

Norwich North MP Chloe Smith gave an update on Norwich For Jobs, the drive she has led to cut youth unemployment, and also outlined the ways the coalition government has helped young people, from improving the county’s schools’ funding formula to “revitalising an old currency” in fostering apprentices.

Mid Norfolk MP George Freeman gave a progress report on improving broadband and mobile phone coverage but admitted there was still a lot of work to do to deliver adequate speeds for businesses to function in the countryside “to make a much more vibrant rural economy”.

Norwich South MP Simon Wright told the conference that SMEs were an important driver of the growth now taking place in the UK economy. And he highlighted all the ways in which the government had aided business from supporting skills and investing in infrastructure to cutting red tape and freeing lending through such initiatives as the British Business Bank.

West Norfolk MP Henry Bellingham raised the importance of exports in cutting the budget deficit – and highlighted the fact only 20pc of SMEs in the UK exported compared to 25pc in France and Germany.

Richard Bacon MP was unfortunately unable to attend on the day, Jonathan Cage from Create Consulting took to the floor to update delegates on the topic of growth corridors with an update on plans for the A47 and Jamie Burles, Abellio Greater Anglia talked about the local improvements to the rail network.

The event was very well received with plenty of delegates taking the opportunity to comment on twitter:

• Listening to @ChloeSmithMP talking about the talent of the young people of #norfolk @norfolkchamber – The Space
• Today’s @norfolkchamber #WellConnected event expertly hosted by @BCCAdam – and good hospitality by team @Dunston_Hall. – Huw Sayer – Writer
• Great turnout today for the MPs Event 2015 @norfolkchamber #wellconnected – Ingrid Wrathall

For photos of the event please visit ourfacebook page.

Over 130 members took over Hollywood Bowl after work on a frosty Thursday evening in January for our annual Super Bowl Challenge 2015. Delegates took advantage of the friendly free networking before getting into the competitive mood as they fought to win the Super Bowl Trophy.

In the end after all 25 teams had finished bowling, it was announced that Price Bailey had managed to retain the status of top bowling team in the membership by winning the trophy for the second year with a score of 728. In second place was Hugh J Boswell with a score of 684 and in third place was Cooper Lomas Recruitment with a score of 663.

We also had a few other achievements that were up for grabs during the evening. Sebastian from Price Bailey scored the highest score of 163 across all delegates competing with Matt from Hugh J Boswell coming in a close second with 159. Also Norfolk Chambers very own Jack Edwards was awarded the funniest bowler for falling twice and a curtsey to finish it off.

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Appointments go live for Meet The Buyer 2015